Time For Another Reality Check

Newtown, CT - November 3, 2017

Time for another reality check and to sift the wheat from the chaff – With the flurry of announcements coming out of CMS combined with external reports on the effectiveness of APMs, the reports from the HCP LAN and the release of the latest Leapfrog Group survey, it’s hard to make sense of it all, and yet let’s try. Earlier this week two reports cast serious doubt on the cost-effectiveness of CMMI’s two marquis programs, the ACO MSSP and BPCI. The first shows that, on balance, the ACO program is costing Medicare money, and this shouldn’t come as a surprise to anyone who can do some very simple arithmetic. Consider this analogy: if you were running a casino in which you paid out the winners and didn’t collect on the losers, how long do you think you’d stay in business? If your business is laundering money, then perhaps you’d love this model. But if you’re the guardian of taxpayer funds, you’re going to shut it down. Similarly, if you’re a health plan you’ll stop pretty quickly. The real issue here isn’t that the underlying effort to make health systems more accountable for costs and quality isn’t effective, quite the contrary. The issue is that the MSSP has to shut down the upside only track because it’s not accomplishing the needed goals. The second report shows that the savings associated with the BPCI are inconclusive, partially because a lot of the participants haven’t been in the program long enough to draw conclusions. Last year, when the prior report was released, we did a little digging of our own and published our results, and they were clear. At least for joint replacements. The rest is far less clear because, at its heart, the BPCI has significant design flaws that we’ve also written about, and that may be why this administration has decided to cancel the expansion of the CJR and the introduction of cardiac bundles. In the midst of all this, the national HCP LAN announces the increased penetration of APMs, and the Leapfrog Group showed that in some states, the ability for hospitals to protect patients from harm can succeed. So are we taking two steps forward and two steps back? No.

What this means to you – The now “legacy” CMMI programs need a serious overhaul and, again, that shouldn’t come as a shock, but as a natural effect of piloting, learning and refining. In the meantime, while the rest of the industry was observing the early steps of the federal programs, the lessons learned were being baked into new, more sophisticated and refined models. And these models have now been operationalized by many plans and are being disseminated throughout networks, and will continue. The release of the LAN’s survey results illustrate that trend and it will continue because no one denies the imperative to get more value out of health care and there are plenty of good examples for how to get there. For us, the most recent Leapfrog Quality Score results show that better value through greater patient safety is possible, and that’s the light at the end of the tunnel. The system can get better when it is encouraged or compelled to do so. The right blend of intrinsic and extrinsic incentives will always achieve that goal, but it requires nuance, flexibility, and adaptation. Not something the federal government is best known for, but something that the private sector and states can do and are doing – at least those that have the courage and whose gonads don’t shrivel in the face of adversity (to riff on Boehner!!). So don’t confuse the wheat for the chaff. The move to well-designed APMs continues unabated and the transformation of the system is afoot.

François de Brantes

François de Brantes is Vice President and Director, Center for Payment Innovation (CPI), which designs and implements innovative payment and benefit plan design programs to motivate physicians, hospitals, and consumer-patients to improve the quality and affordability of care. CPI works with states, employers, health plans, and provider organizations, as well as national consultancies such as McKinsey and KPMG, to advise them on payment and delivery system reform.

Mr. de Brantes has been published in peer-reviewed journals such as The New England Journal of Medicine, JAMA, and Health Affairs and is frequently quoted in national media, including The New York Times. He has also published two books, the latest being “The Incentive Cure: The Real Relief For Health Care.”